The local market rallied in afternoon trade to close flat again today as investors welcomed the prospect of a possible interest rate cut next week.
At 1615 AEST official market close, the S&P/ASX 200 benchmark index inched up 0.02% to 5,047.2 points, while the broader All Ordinaries index edged down 0.03% to 5,026.3 points.
Morning trade was subdued as investors waited for building approval figures, which fell 6.9% against expectations of a rise, and for a speech by Reserve Bank governor Glenn Stevens, who said the inflation outlook may leave room for interest rate cuts if needed.
CMC Markets analyst Betty Lam said Mr Stevens' comments kick-started trade as financials gained after losing ground earlier in the day.
"The market was swift to respond, as investors rallied to chalk up a 15 point gain within an hour after Governor Stevens began his charity address," Ms Lam said.
IG analyst Chris Weston expects the central bank to cut rates next week after Mr Stevens' speech and the disappointing building numbers.
"You have to think that if the RBA doesn’t move, then it would looking at something that no one else can see," Mr Weston said.
"There is even a joke on the floor that the banks should come out today and pre-announce cuts.
"June building approvals show that you can bring down the cash rate 200 basis points, but it doesn’t always translate into good housing data."